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Tesla Stock Rises On Earnings: “Millions of Cars with Full Self-Driving Can Be Sold At 100%


Tesla (TSLA) reported mixed fourth-quarter results Wednesday, topping earnings estimates while missing on revenue views. Tesla stock rose Wednesday, extending a powerful rebound of more than 40% from the bear market low.




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After a terrible 2022, during which Tesla stock plunged sharply in December, shares tumbled again to start 2023. However, Tesla has bounced since its big price cuts announced Jan. 6 for vehicles in China, and kept rising since announcing U.S. and European price cuts a week later.

Analysts and investors will look closely into results on Wednesday for a better idea of what Tesla is expecting for 2o23.

Tesla stock rose 1.7% after hours. Shares edged up 0.4% to 144.47 during Wednesday’s market trade, reversing higher.

Tesla Earnings

Estimates: Analysts forecast earnings jumping 33% to $1.13 per share in the fourth quarter. At the end of Dec. 2022, analysts predicted EPS of $1.25. Analysts had set the revenue target at 39% growth, to $24.67 billion.

Earnings: Tesla’s EPS advanced 40% to $1.19 while revenue grew 37% to $24.32 billion in Q4.

For the full year, revenue increased 51% to $81.46 billion, missing estimates. Earnings ballooned 80% to $4.07 per share, topping Wall Street expectations.

Tesla had already announced its deliveries hit a record 405,278 in the fourth quarter. This missed lowered forecasts despite aggressive year-end incentives. Vehicle deliveries jumped 31% vs. a year earlier and nearly 18% vs. Q3’s 343,830. The deliveries also swelled 40% to 1,313,851 in 2022. That was well below the company’s 50% growth goal.

Analysts had expected Q4 Tesla deliveries of roughly 420,000, whittled down significantly from higher estimates. Tesla’s Q3 deliveries also had fallen short.

Tesla production came in at 439,701 in the fourth quarter, exceeding deliveries by more than 34,000. In Q3, output topped sales by just over 22,000. Tesla production came in at 439,701 in the fourth quarter, exceeding deliveries by more than 34,000. In Q3, output topped sales by just over 22,000.

With output ramping up at the company’s Berlin and Austin, Texas, plants, Tesla’s overall production capacity is now well above 450,000 a quarter.

Tesla unit sales came in at 1,313,851 for 2022, up 40% vs. 2021 but below the 50% target. The Model 3 sedan and Model Y crossover accounted for the vast majority of sales. The high-end Model S and X vehicles accounted for the rest.

Meanwhile, the Cybertruck is slated to arrive in 2023, which would be Tesla’s first new model since the Model Y launched in early 2020. The oft-delayed truck will begin “early production” in midyear, according to CEO Elon Musk. Other reports say the Cybertruck will begin mass production in late 2023.

Tesla also began delivering its long haul Semi trucks to PepsiCo (PEP) in December. It’s unclear how many Semi trucks will be produced in 2023, with key prices and specs still unclear. Tesla is planning to build a $3.5 billion manufacturing facility in Northern Nevada for Semi trucks, according to the Nevada Independent.

On Wednesday, Tesla confirmed that production and delivery challenges throughout 2022 “were largely concentrated in China.”

Tesla plans to  grow its production volume “as quickly as possible” to align with with its 50% compound annual growth rate (CAGR) target. That goal dates back to 2021. For 2023, Tesla said it expects to produce around 1.8 million vehicles, an increase of 37% compared to 2022.

The EV giant also said that the Cybertruck “remains on track to begin production later this year.”

The company added that its next generation vehicle platform is under development and that additional details would be shared at its Investor Day on March 1, 2023.

Tesla Stock: Earnings Come After Price Cuts

Tesla’s Q4 earnings follow Tesla China EV registrations bouncing in the week of Jan. 5-16, following recent big price cuts. The most recent registration numbers appear to reflects some benefit from Tesla’s Jan. 6 decision to cut prices in China.

Tesla slashed prices for the Model 3 and Y in China, with the base Model 3 cut more than 13% to $33,570. Local media reports in China suggested Tesla had received 30,000 orders within three days of the announced cuts, according to CnEVPost.

Tesla has also announced price cuts in the U.S. and Europe. This will make more models eligible for tax incentives of $7,500 under the Inflation Reduction Act (IRA).

The EV giant slashed U.S. Model 3 prices by 6%-14%, depending on the trim. A standard trim Model 3 RWD has been cut by $3,000 to $43,990. With the IRA tax credit applied to the vehicle, consumers that meet income limits would be paying $36,240.

The Performance Model 3 trim was cut $9,000 to $53,990, getting under the $55,000 limit for tax credits. Meanwhile, Tesla’s base Model Y has been slashed $13,000, or nearly 20%, to $52,990, also below the tax credit limit. The Performance variant for that vehicle has been cut to $56,990, also down $13,000.

Musk told investors Wednesday that so far in January, Tesla has “seen the strongest orders year-to-date than ever in our history.”  The Tesla CEO said currently orders are coming in at “almost twice the rate of production” and that is resulting in increased Model Y prices.

“I think there’s just a vast number of people that want to buy a Tesla car but can’t afford it.  And so these price changes really make a difference for the average consumer,” Musk said.

“It’s always been our goal at Tesla to make cars that are affordable to as many people as possible so I’m glad that we’re able to do so,” he added.

State Of Self Driving

Musk said during the earnings call Wednesday Tesla has deployed Full Self Driving (FSD) Beta for city streets to roughly 400,000 customers in North America.

The EV giant is currently at about 100 million miles of FSD, not including highway driving, according to Musk.

“We would not have released the FSD Beta if the safety statistics were not excellent,” Musk said.

The Tesla CEO added that almost all Tesla vehicles currently can have self-driving software uploaded to them.

“That means that there’s millions of cars with Full Self-Driving that can be sold at essentially 100% gross margin,” Musk said.  “The value of FSD grows as the autonomous capability grows, and then when it becomes fully autonomous, that is a value increase in the fleet that might be the biggest asset value increase of anything in history.”

Tesla Stock

Tesla stock has soared 43% since a Jan. 6 low of 101.81, coming up to their 50-day and 10-week lines.

That’s despite a number of analysts have also weighed in on Tesla stock, cutting price targets and earnings estimates.

TSLA shares rank third in the Auto Manufacturers industry group. Tesla stock has an 46 Composite Rating out of 99. The stock has an 5 Relative Strength Rating, an exclusive IBD Stock Checkup gauge for share-price movement. The EPS rating is 75.

Please follow Kit Norton on Twitter @KitNorton for more coverage.

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